We’ve been watching Brazil very closely throughout January as it consolidates in this tight range. When we find clean bases like this, it definitely catches our attention. The problem is that it hasn’t done anything yet this year to confirm its next up move.

We’re looking at the MSCI Brazil ETF $EWZ. This is a daily chart showing the tight pattern throughout 2013. We want to start seeing some daily closes above 57.50 for confirmation, but there is a ton of upside potential in this one:

Here is a longer-term chart that shows why we think it’s promising. Last summer, $EWZ managed to hold on to its 2011 lows and has been rangebound ever since. This allows it to build up enough momentum to take it up to $70, which would be over 22% above the breakout levels mentioned above.

It’s not something we’re diving into blindly at this point, as it is still in no man’s land hanging around here in the middle of this 2013 range. But we have to keep a close eye on it due to the monster upside potential.

This is definitely an interesting one. Love the base, love the upside, love the easy out in case we’re wrong. All good things.

J.C. Parets is the Founder & President of Eagle Bay Capital, LLC. He is a 10-year veteran and Market Technician who actively manages money incorporating Technical Analysis and Behavioral Finance into his practice. JC’s work has been featured regularly on CNBC, Fox Business, Bloomberg, Business News Network, Wall Street Journal and Yahoo Finance among many other financial media outlets. More...

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